When it comes to a for-profit blog, what is most important is the bottom line, and how your visitors contribute to this. Not every visitor may directly generate profit or even contribute to the bottom line. In fact, if you use a metered hosting service and spend money acquiring them, they can actually result in a loss. Many blogs have determined a way in which they may effectively measure the profit per visitor, at least at the aggregate level.
The most effective blogs are able to calibrate their marketing campaigns and adjust their website accordingly in order to maximize the profit per visitor in a constantly improving way. This brief guide is designed to provide you with the information needed to begin maximizing the profit from your blog visitors, beginning by analyzing your current profit per user, and what you may do to improve upon it.
How to Estimate Current Profit per Visitor
There are several ways in which your company may determine its profit per visitor. In general, there are two main approaches included the direct contribution and aggregate average. The direct contribution approach attempts to determine what customers generate revenue and how much it costs to acquire them. For instance, you may find that six percent of visitors click an advertisement and sixty percent of these were acquired through Google News. By analyzing the referrals sources for those that completed goals in your analytics platform, such as Google Analytics, you may attribute these sources.
The second approach is to combine all the data in terms of overall revenue and overall advertising spend. If a blog is estimating the profit per visitor, this is the most likely route that it has taken. Not only is this the most convenient metric, but it provides easier data to get an idea of how the overall blog is performing. This method is good from a performance perspective, but it can be difficult if you are attempting to form granular marketing decisions. For instance, you will not be able to determine where the customers that are generating a profit are being derived from.
Direct Profit per Visitor
The direct profit per visitor approach gets quite complicated if your blog has many referrals and traffic sources. What may be more advantageous is to find what factors correlate with customer spend. For instance, you may find that referrals from Facebook almost never result in an advertisement click. In contrast, your SEO efforts may be the most likely outcome that results in visitor profit. The most effective way to accomplish this is to establish ‘goals’ in Google Analytics.
- Breakdown your campaign goals based on the revenue received per goal
Some goals may be selling a product on your blog that you generate a higher commission on. In other cases, it may be an AdSense advertisement that you receive a specific cost-per-click on. Make sure to create levels of revenue for each set of goals.
- Link referral traffic with goal conversions
What percentage of your customers from each source convert by executing the script associated with a conversion? Moreover, what does this conversion cost and how can you make sure that you generate a profit? Google Analytics, and comparable analytics platforms, enable you to link your referral sources with goal conversions and the amount generated that has been attributed to each goal. You may find that Facebook advertisements have a higher goal conversion rate, but for lower cost advertisements or referrals from a certain affiliate generate much lower conversion rates and are not worth your time.
Average Profit per Visitor
When it comes to average profit per visitor, this metric is much more easy to determine at a basic level. If your blog is not already generating this metric, it may be time for you to break into an existentialist crisis and start questioning the existence of your blog. This metric can be quickly determined by dividing the profit within a set period of time to the amount of visitors in that set period of time. For instance, if you received two hundred thousand visitors in January and received one hundred thousand dollars, your revenue per visitor would be fifty cents.
If you wanted to retrieve the average profit for the month on January, you could also remove the total marketing costs for that month. If you sent ten thousand dollars in marketing for January, your average gross profit per visitor would be forty-five cents per visitor. Wait a minute, you still have the hosting expenses and the salaries for people doing the writing (if you are running blogging business that big). The office doesn’t pay itself and the utility company usually launches a militia when you miss a payment. Your monthly operating expenses are sixty-five hundred, which generates forty-two cents profit per visitor.
How to Improve Profit per Visitor
With all information, it is only advantageous if it is capable of being applied to boost your company’s profitability. For many blogs, the solution is to improve conversion rates by redesigning their website, but this could have potentially negative implications. Therefore, how is one to reach the perfect combination of factors to maximize the profit per visitor for the blog?
Based on over two hundred blogs analyzed across fifteen industry niches, we have learned that there are two approaches that your company may take. The first of which is on-site factors that will influence your conversion rates, the second is calibrating your marketing campaign to attract more valuable users and ditch underperforming channels.
- Increase your website conversion rates
Improving the conversion rates on your blog is a common sense strategy. Any blog that is not performing conversion rate optimization should definitely adopt it. When it comes to maximizing profit per visitor, however, these can fundamentally reshape the approach to conversion optimization. Should you, for instance, focus on increasing registration to your Email list or single visit conversion for your advertisements? Perhaps visitors don’t click any ads or convert at all their first visit and it’s more important to retain them or build a list to sell the leads. Regardless of your approach, focusing on conversion optimization is a foundation to maximizing the profit from your visitors.
- Calibrate your marketing campaign
When it comes to digital marketing, likely the only kind that your blog is performing, there is really no excuse for not knowing the return on investment from each channel. This gets back to using your ‘goals’ and traffic referrals to understand your return on investment by marketing channel. You may find that the three thousand per month your spending on Facebook would be much better off being spent on affiliate marketing on synergistic blogs or developing great content that will get shared on partner websites. When you understand the profit by source, you may appropriately correlate returns from each channel and have a solid understanding of how the merge to contribute to your bottom line.
Every blog wants to maximize its profit, but many are always focused on how to triple their reader base rather than triple the profit from the traffic they already receive. In the highly competitive marketplace for user attention, this can be understandable. However, like any end goal, there are generally multiple approaches that you may take. Therefore, it also makes sense to grant time and attention to what factors will influence your profit per customer and how to improve upon it.
This guide is by no means comprehensive, nor will everything in it apply to your specific circumstance. At the very least, it should serve as a reminder to not simply take your traffic and be satisfied, but rather delve into the details and backlog the analytics that will provide insight into where your most profitable visitors are coming from and how to increase the amount received from them when they do land on your blog.
Chase is the managing director at Pro Business Plans, a company that prepares investor materials. He has over seven years of executive level management consulting and investment banking experience across the Middle-East and Asia-Pacific. Follow Pro Business Plans on Facebook or Twitter.